UPDATE: Bitcoiners Who Use Tor – Be Warned!

Bitcoiners who use Tor be warned! An obscure change to the Federal Rules of Criminal Procedure will automatically take effect on December 1 unless Congress blocks it.

Also read: China’s ‘Google’ Baidu Halts Bitcoin Ads, Leaves Market Guessing

No Warrant Required

shutterstock_334322852A revised Rule 41 would allow the FBI to use a single warrant to hack an indefinite number of computers anywhere in the world. To hack a computer today, the FBI requires a warrant issued by a court with jurisdiction over the location of the targeted machine. After December 1, the FBI can quietly get a warrant from any federal judge and hack not merely a single computer but all computers connected to it…and so on and so on.

In theory, a single warrant issued anywhere in America would allow the FBI to control millions of computers on a botnet whether or not they were located in the United States.

Tor and its equivalents are a prime target, as evidenced by the recent shut-down of KickassTorrents and the arrest of its owner Artem Vaulin. (Although the arrest occurred in the Poland, it was driven by a complaint filed in the District Court in Chicago, and Vaulin is being extradited to the U.S.).

The change to Rule 41 is designed to attack Tor through its user base. To justify the single warrant required for mass surveillance, the FBI merely needs to show that someone tried to cloak his computer’s location. The FBI could then pursue the user and all of his computer connections.

Stopping Mass Hacking Act

Privacy advocates, such as Electronic Frontier Foundation, raised the profile of this threat high enough to stir a backlash. Two bills to block the rule change were introduced in Congress in May: H.R. 5321 in the House; and, S. 2952 in the Senate. Both are informally called the Stopping Mass Hacking Act. Being introduced is the first step in a bill’s journey through Congress. The next step is to refer the bill to a committee for review, which is the stage where the two Acts are currently stuck.

WASHINGTON - NOVEMBER 19: The U.S. Capitol is seen on November 19, 2011 in Washington, DC. The Joint Select Committee on Deficit Reduction, or super committee, which faces a Wednesday deadline to reach a deficit reduction agreement, planned to meet over the weekend. (Photo by Brendan Hoffman/Getty Images)

They are unlikely to be fast-tracked. Many in Congress are consumed in a battle for re-election; the Presidential campaign will absorb political attention until November 8; the new Presidency will absorb it thereafter; there are many more pressing issues, like Syria; and, the rule change is not on the general public’s radar. Moreover, when Congress assembles in early September, it will be largely checking in before going on vacation. For example, the House recesses from October 1 to November 13 (44 days) and again from November 18 to 28 (11 days). Added to this, is the fact that only 15% of Congressional bills made it out of committee between 2013 to 2015.

If the Acts do come to a vote before December 1, what are the odds of their being enacted? GovTrack monitors and predicts the progress of bills with reliable accuracy. Its predictions are based on factors such the gravitas of a bill’s sponsors and the composition of the reviewing committee. The watchdog site gives H.R. 5321 a 19% chance of passing committee and a 4% chance of being enacted. S. 2952 is given a 5% chance of passing committee and a 2% chance of being enacted.

In short, Bitcoiners and other privacy-seekers should make plans right now to replace Tor or similarly vulnerable tools.

FBI Hedges Its Bet with Morality Politics

If the revised Rule 41 goes into effect, it will be extremely difficult to remove. For one thing, it offers authorities a coveted expansion of power over taxable pools of hidden assets: cryptocurrencies.

A monopoly on money is at the core of political power and the rulers are aware that digital currencies offer financial autonomy to the individual at their expense. The real goal of Rule 41 is to return financial power to central banks and governments.

Jason Weinstein

Any post-December backlash will also confront the barrier of ‘morality politics’. This form of political theatre is intended to stir public outrage and make it easier to impose invasive laws. The political theatre that justifies Rule 41 is cybercrime. The cybercrimes most often cited are drug trafficking and slave or sex trafficking, especially in the form of child pornography. Cryptocurrencies, it is said, are overwhelmingly used to launder money for such crimes.

Authorities have been extremely successful in forging a link between moral turpitude and privacy-seeking, between evil-doing and cryptocurrencies. Jason Weinstein was formerly a deputy assistant attorney general in charge of cybercrime at the the Department of Justice and he is currently the Director of the Blockchain Alliance.

Weinstein writes:

“It’s ironic that even though criminal and terrorist use of the Internet is rampant – and was from the very beginning – nobody thinks of the Internet as the ‘network of criminals’. Instead, people think of the Internet as a place where we all work, shop, socialize, communicate, consume entertainment and learn. But it’s a measure of the extent of bitcoin’s image problem that every time a cybercriminal commits a ransomware or other cyberattack and happens to use bitcoins as a medium of payment, the case is characterized by the press and policymakers as a bitcoin problem and not an Internet or cybercrime problem.”

The perceived connection between evil-doing and cryptocurrencies now runs so deep that it reaches down into pop culture, including comic books. In the DC universe’s Green Arrow Rebirth #1, for example, writer Ben Percy creates a new cryptocurrency called Lexcoin.  Or, rather, the archvillian character Lex Luthor creates the new digital currency. Before beginning his online slave auction of a 25-year-old female, Luthor announces, “Before we begin, let me remind you that this feed is camouflaged by V.P.N. Relays…that we only accept LEXCOIN cryptocurrency transactions…”

Linking violent crime to cryptocurrencies is a political expedient and not supported by reality. A December 12, 2015, Bitcoin article entitled “New UK Report Proves Bitcoin is Not Terrorism or Criminal Risk,” presented the study’s conclusions:

[W]hen it comes to a crime governments hold in high regard, ‘money laundering’, bitcoin is at the bottom of the list as far as a being a criminal risk.

Banks, accountancy service providers and legal service providers topped the list. The report is particularly significant because it is “the first of its kind for Britain, and may be the first of such scope for any developed nation.”

Reality often lives in the shadow of politics.

Bitcoiners Should Seek Tor Alternatives

The revised Rule 41 is likely to be enacted on December 1. When enacted, it is unlikely to be reversed without a strenuous legal battle. Since the revised rule originated at the Supreme Court level, a legal battle may be futile.

In short, bitcoiners who use Tor or its equivalent need a new strategy to preserve their privacy. And they need it now.

Do you know of any new strategies to preserve privacy? Let us know in the comments below!

Update (September 15, 2016, 3:05 PM EST): This article has been updated to correct a factual inaccuracy. Artem Vaulin’s arrest took place in Poland, not Ukraine. 

Images courtesy of shutterstock, tor, getty images

Tags in this story
cryptocurrrency, FBI, Rule 41, Tor, warrants


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